Development Bank To Loan $1.3bn To MSMEs

The Development Bank of Nigeria will deploy $1.3 billion as loans to Micro, Small and Medium Enterprises (MSMEs) in the country.

Managing Director (MD) of the bank Tony Okpanachi revealed this in Abuja recently

Okpanachi said, “In terms of the amount I can assure you that we have enough funding now of about $1.3 billion so we can draw down. We have $1.3 billion available to us to draw and as we disburse we draw more.”

According to him, Partnering Financial Institutions (PFIs) have received more than 500 requests from operators in the sector.

He noted that, “Every development finance institution is more like a catalyst. You cannot meet all the demands.

“A typical business comes to a bank; they need working capital for instance, which is mostly short-tenured like 90 days, six months, etc., and most banks are willing to take those businesses.

“If a guy comes and says he needs to buy an equipment for his factory and he needs four years to pay, the banks run away from that.

“And that is where development financial institutions come in. Another guy comes and said he needs seven years, usually most banks would run away and that’s where we step in. So it’s not either or, it’s collaboration. That’s the way it works.

“Some people say why do you guys want to go through banks again? But look at the total balance sheets of banks in Nigeria; which DFI can come near? Look at their branch networks across the country, and the customer history they have.

“Which DFI can meet that? So the financial institutions can now give long-term financing to their customers with DBN funds and short-term with their own funds. The gap was long-term funding.”

On assistance to start-ups, he said, “Part of what we are doing differently is that we are ready to help start-ups.

“This capacity building we are telling the financial institution that once a project comes and they assess it to be bankable, we are ready to take up the risk with them to give funding for startups.

“Subsequently, we are going to come up with products that we are going to sell through these financial institutions for such institutions that will again sell them down the line.

“For now we want the buy-in of the financial institutions themselves so that we tell them the fund is available for them and we are willing to fund startups.”

Egobiambu Emmanuel is a Mass Communication graduate from the University of Benin.
He is a media enthusiast, loves reading and writing, and has a special interest in personal development. Emmanuel is a reporter with Concise News.